When a customer wishes to buy an item from a supplier that requires financing, the customer often requests terms of repayment from the supplier. The supplier may decline to provide the customer a line of credit, since the customer is either unknown to the supplier or the risk of the customer not repaying the supplier is perceived as too great. The customer will then usually contact their lending institution to apply for a monetary loan. After checking the customer's business information and business credit standing as well as their personal information and credit history, a representative (e.g., a loan officer) of the lending institution informs the customer of the loan's terms, .e.g., the loan amount, period, and interest rate. If the customer agrees to the terms of the loan, the lender representative delivers documentation to the customer that when executed, grants to the lending institution a security interest in the purchased product for the monetary loan.
With the advantages of electronic commerce (e-commerce), many aspects of the above process may now be performed online. However, while these and other online options are significantly more convenient than their manual alternatives, they still require time and effort from customers, including the need to provide the lending institutions with sufficient evidence of security interest. Thus, the financing process as described above is currently not useful for e-commerce transactions as it requires initiating an interaction and negotiation process with the loan officer of the financial institute.
Furthermore, the described typical lending procedure does not include a structured tool for the lender to track the lent money after monetary payment to the customer, and therefore the lender cannot monitor that the lent money was actually paid by the customer to the supplier according the terms and conditions of the loan. For example, the customer may be a bakery requesting a loan for a new oven. However, the provided loan may be used for payments of debts of the bakery business. The lender in most cases has no knowledge of how the money was spent.
It would therefore be advantageous to overcome the limitations of the prior art by providing a solution for customers to finance their deals on-line while shopping for goods or services.